Around 600,000 traders in Jharkhand kept their shops closed on Friday to protest against the state government's decision to impose four percent value-added tax (VAT) on food grains from June 1.

Around 600,000 traders in Jharkhand kept their shops closed on Friday to protest against the state government's decision to impose four percent value-added tax (VAT) on food grains from June 1.

The traders in Ranchi took out a protest march to Governor Syed Sibte Razi's house and handed over a memorandum to officials in his office, seeking the roll-back of the government decision.

"We have given one week's time to the governor to roll back the VAT on food grains, otherwise we will intensify our agitation," said Anchal Kinger, president of the Federation of Jharkhand Chamber of Commerce and Industries (FJCCI).

The imposition of VAT has led to a rise of food grain prices. The prices of rice, wheat, potato, onion, flour and food grains have increased between Rs 2 and Rs 10 per kilogram, traders said.

The government is expected to earn an additional Rs 5 crore per year through higher tax.

However, the decision is likely to affect the poor in the state, where 52 per cent of the population live below the poverty line (BPL), the traders said.